Labour on Friday accused the Government of being “detached from reality” as the Chancellor announced the largest tax cuts in a generation.
Kwasi Kwarteng laid out sweeping policies intended to fire up the flailing economy with expansive reforms largely paid for by Government borrowing.
The Shadow Chancellor attacked new Prime Minister Liz Truss, who has been in Government since 2010, as she branded today’s shake-up “an admission of 12 years of economic failure”.
Rachel Reeves said that when Britain faced a cost-of-living crisis, soaring inflation and climbing interest rates, the PM and Chancellor were “two desperate gamblers in a casino”.
She added: “Now here we are — one last throw of the dice, one last claim that these ministers will be different. For all the chopping and changing and chaos and confusion there has been one person there throughout: the Prime Minister.
“She’s been a minister for a decade, nodding along to every single economic decision. When the Prime Minister says she wants to break free from the past, what she really means is she is trying to break free from her own record.
“But the question is: who pays? It is right that the energy producers who have profited so much from the rise in prices make a contribution. But when the country asked who should foot the bill for their energy rescue package, the Conservatives responded: ‘You’.”
Ms Reeves repeated Labour’s call for a further windfall tax on the oil and gas companies, which have seen record profits due to spiraling energy prices, to help pay for tax cuts and the coming energy bailout.
“The [Government] had a chance to correct this injustice today,” she said.
“Instead of standing up for working people, the Conservatives chose to shield the gigantic windfall profits of the energy giants leaving tens of billions of pounds on the table and pushing all the costs onto borrowing to be paid for by current and future taxpayers.
“As the Tories become more and more detached from reality, millions of people are lying awake at night worrying about how they’ll make ends meet.”
Ms Truss admitted the UK faces “really tough times” on Friday but promised the “growth plan will deliver better jobs, more funding for public services and higher wages”.
Ms Reeves earlier said the evidence shows low rates of corporation tax are “not the best way to boost investment and productivity”, adding Labour would use targeted investment allowances and scrap “outdated and unfair business rates that harm our high streets and small businesses”.
She said it would be replaced with a “system fit for the 21st century”.
On home ownership, Ms Reeves added: “These stamp duty changes have been tried before. Last time the Government did it a third of the people who benefited were buying a second home, a third home or a buy-to-let property. Is that really the best use of taxpayers’ money when borrowing and debt are already so high?”
She also criticised the Government for not having included independent forecasts from the Office for Budget Responsibility in the mini-budget statement, adding: “Never has a Government borrowed so much and explained so little.”
Responding to Ms Reeves’ address, the Chancellor argued: “You cannot tax your way to prosperity.”
“You cannot grow the economy if you keep taxing families,” he said. “You cannot grow the economy if you see business as the enemy.
“You cannot help workers by increasing their taxes, and far from denegrating British workers what our measures have done is they are relieving burdens on our workers and our people by intervening on energy prices and also relieving the burden of taxation.”
Ms Reeves’ comments came as consumer money expert Martin Lewis described the Government’s new financial plan as “staggering”.
The Money Saving Expert founder tweeted: “That really was quite a staggering statement from a Conservative Party government.
“Huge new borrowing at the same time as cutting taxes. It’s all aimed at growing the economy. I really hope it works. I really worry what happens if it doesn’t.”
